Kim Dotcom's bold new venture, the file-storage and sharing service Mega, is drawing criticism as security researchers analyze how the site protects users' data. In short, they advise: don't trust it.

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Kim Dotcom's bold new venture, the file-storage and sharing service Mega, is drawing criticism as security researchers analyze how the site protects users' data. In short, they advise: don't trust it.

While Mega officials admit they're "newbies" to JavaScript, the programming language used to execute key elements of their service, they say their website is no more vulnerable than online banking sites to attack.

Dotcom threw a large launch party for Mega on Sunday at his mansion outside of Auckland. The service is the successor to Megaupload, the file-sharing site that Dotcom and his colleagues were indicted for in the U.S. in January 2012 on copyright infringement charges.

The flamboyant Dotcom is assuring Mega's users that the site's encryption will protect their privacy and data, but the implementation of that encryption scheme is fundamentally flawed, observers allege.

Mega uses SSL (Secure Sockets Layer) a widely used protocol for encryption across the internet for securing the connection between its users' computers and its own servers. Once an SSL connection is made, Mega pushes JavaScript code to a person's browser, which then encrypts the person's files before the data is sent to Mega's servers.

The problem is that SSL has long been recognized as a weak point on the web. In 2009, security researcher Moxie Marlinspike created a tool called SSLstrip, which allows an attacker to intercept and stop an SSL connection. The attacker can then spy on whatever data the user sends to the fake website.

Since Mega fundamentally relies on SSL, "there is really no reason to be doing client-side encryption," Marlinspike said in an interview Monday. "These kind of schemes are vulnerable to all of the problems with SSL."

Someone who attacks Mega using SSLstrip could then send their own custom malicious JavaScript to the victim's browser. The user would inevitably divulge his password, which would allow the attacker to decrypt all his data stored with Mega.

Mathias Ortmann, Mega's CTO, said in an interview Monday that there are a variety of web-based attacks that Mega would be vulnerable to just like any other site that relies on SSL for security, such as for online banking. Those scenarios are outlined on Mega's site, he said.

"If they had bothered to read that they would have seen that we basically state exactly what they are accusing us of as possible attack vectors plus some others they are not accusing us of," said Ortmann. "All of these SSL-related attacks do no apply specifically to us. They apply to companies with equally high security requirements or even higher requirements."

SSL is underpinned by encrypted security certificates that are issued by authorized companies and organizations. But the issuing system has long been criticized since scammers have been able to obtain valid certificates for websites they don't own.

Ortmann acknowledged that someone could try to trick a certificate authority into issuing a real SSL certificate for mega.co.nz, which would allow the attacker to create a fake Mega website that appears to have proper credentials.

In a nod to the intense dislike of Kim Dotcom's Mega enterprise, Ortmann said, "I'm actually expecting some government to have a mega.co.nz shadow certificate issued at some point and used in an attack." But Mega will periodically scan for unauthorized SSL certificates, he said.

If Mega's servers were compromised, it would also be possible for an attacker to deliver modified, malicious JavaScript, said Nadim Kobeissi, developer of the encrypted instant messaging program Cryptocat. It would also be possible for Mega itself to deliver malicious code.

"Every time you open the website, the encryption code is sent from scratch," Kobeissi said "So if one day I decide I want to disable all encryption for you, I can just serve your username different code that doesn't encrypt anything and instead steals your encryption keys."

Ortmann countered that users are always forced to trust their service provider when downloading and running code. Because Mega's JavaScript is sent to the browser, people will be able to regularly analyze the code and ensure it is trustworthy or not. If Mega tampered with the JavaScript, "it would be detectable," Ortmann said.

Marlinspike said a safer way would be for Mega to use a signed browser extension to encrypt the data, which would prevent tampering by an attacker. Alternatively, an installed software client would accomplish the same end, he said, without exposing a user to the insecurities of SSL.

Marlinspike said he thinks Mega users fundamentally don't care that much about security since they're just interested in file sharing. Since Mega will just see encrypted data on their servers, the setup appears to absolve the site's founders from the copyright infringement issues of Megaupload.

"All that matters is the operators of Mega can claim they don't have the technical ability to inspect the contents on the server for copyright infringement," Marlinspike said.

Like any new online service, Mega's code is already being prodded. On Sunday, it was revealed the site had a cross-site scripting flaw, which in some cases can allow an attacker to steal a user's cookies, which would allow at least a temporary takeover of a victim's account. It was quickly fixed.

Ortmann elaborated: "The cross-site scripting issue was more than embarrassing. That should not have happened. This is really due to the fact that Bram and I are complete JavaScript newbies and have never expected this behavior by a browser. We actually discussed it, but we didn't test it, so that's kind of embarrassing. That was fixed after 30 minutes or less than an hour after it was reported to us."

He said Mega will post more details later today on the website addressing the points raised by its critics in regards to security.